Harle, Kefi and Rahardja, Liana (2016) The Analysis of Stock Valuation Methods on Stock Prices in the LQ45 Index. Bachelor thesis, Swiss German University.

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Abstract

There are several types of stock valuation methods that can be used to determine the intrinsic value of a stock. The most widely used methods are FCFF and FCFE model. In recent years, the accounting based method RIM has gained popularity because it is considered as an equivalent to the FCFF and FCFE model. In theory, FCFF, FCFE and RIM should be able to provide identical valuations. In practice however, the results from each methods often yield different valuations. This research is intended to analyze the difference between the results of the valuation methods to determine which methods provides the closest valuations compared to the market prices. This research used secondary data from the financial statements of the companies in the LQ45 index within 2010-2014 periods. Based on the results of descriptive quantitative analysis, each stock valuation methods provide different valuations. It appears that during 2010-2014, the majority of the stocks in the LQ45 index are overvalued. One sample t-test is conducted to determine which method provides the closest valuation. Based on the result, it appears that FCFE model is the most appropriate valuation method to be used in stock valuation analysis in LQ45.

Item Type:	Thesis (Bachelor)
Uncontrolled Keywords:	Stock Valuation; FCFF; FCFE; RIM; Intrinsic Value.
Subjects:	H Social Sciences > HF Commerce > HF5001 Business H Social Sciences > HG Finance > HG4636 Stocks--Prices
Divisions:	Faculty of Business Administration and Communication > Department of Business Administration
Depositing User:	Atroridho Rizky
Date Deposited:	03 Nov 2020 13:41
Last Modified:	03 Nov 2020 13:41
URI:	http://repository.sgu.ac.id/id/eprint/1346

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